FG Slashes Oil Revenue Expectation to N60.97tn for 2026
The Federal Government is projecting about N60.97tn in oil revenue for the 2026 fiscal year, lower than the earnings anticipated in the 2025 budget, reflecting more conservative assumptions on crude oil prices and production.
The projection is based on an analysis and the calculation of data contained in the 2026 Appropriation Bill presented to a joint session of the National Assembly in Abuja by President Bola Tinubu on Friday.
According to the President, the 2026 revenue estimate is anchored on a benchmark crude oil price of $64.85 per barrel, daily production of 1.84 million barrels, and an average exchange rate of N1,400 to the dollar.
Based on these parameters, findings on Sunday indicated that Nigeria is expected to produce about 671.6 million barrels of crude oil in 2026, generating estimated gross earnings of $43.55bn, which translates to approximately N60.97tn at the projected exchange rate.
By comparison, the 2025 budget is based on a higher oil price benchmark of $75 per barrel and a more ambitious production target of 2.06 million barrels per day, with the same exchange rate assumption of N1,400 to the dollar.
At those levels, projected crude oil output for 2025 stands at about 751.9 million barrels, with estimated oil revenue of $56.39bn, equivalent to roughly N78.95tn.
The comparison indicates a projected decline of about N17.98tn in oil revenue between 2025 and 2026, largely due to price fluctuation and lower production assumptions.
The 2026 benchmarks were seen to be deliberately conservative to account for uncertainties in the global oil market and ongoing domestic challenges, including security issues and infrastructure constraints affecting crude oil production.
In the outgoing year, oil prices fell from about $80 per barrel in the first and second quarters. Last week, Brent traded below $60 before it rebounded on Wednesday due to global oversupply.
Oil receipts remain a key component of government revenue, even as the administration intensifies efforts to boost non-oil income and strengthen fiscal sustainability.
Between January and November 2025, average daily oil production (oil and condensate) hovered around 1.5 and 1.7 million barrels per day, indicating that the country could not achieve its oil revenue projections for the year, though the exchange rate is above the projected N1,400 to a United States dollar. Oil production fell from 1.7 mbpd in January to 1.5 mbpd in November.
“Distinguished members, the 2026 Federal Budget is anchored on realism, prudence, and growth. The key aggregates are as follows: Expected total revenue is N34.33tn. Projected total expenditure is N58.18tn, including N15.52tn for debt servicing. Recurrent (non‑debt) expenditure is N15.25tn. Capital expenditure will be N26.08tn. The budget deficit is expected to be N23.85tn, representing 4.28 per cent of gross domestic product.
“These numbers are not mere accounting lines. They are a statement of national priorities. We remain firmly committed to fiscal sustainability, debt transparency, and value‑for‑money spending.
“The 2026–2028 Medium‑Term Expenditure Framework and Fiscal Strategy Paper sets the parameters for this Budget. Our projections are based on a conservative crude oil benchmark of $64.85 per barrel, crude oil production of 1.84 million barrels per day, and an average exchange rate of N1,400 to the US dollar for the 2026 fiscal year,” Tinubu said in part.
SOURCE: The PUNCH